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70% of ecommerce purchases in Q1FY16 were through COD: Report

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Cash-on-delivery (COD) was the most preferred method to pay for e-commerce purchases accounting for 70% of all transactions, according to a report by Sokrati that studied more than 1.4 million online ‘purchasers’ buying from over 100 online retailers.  Rest of the payment methods like net banking and credit & debit cards (20.5%), and digital wallets (2.4%) together accounted for the remaining 30%. The data was recorded during the first quarter of this year (Q1FY16).

However, the average order value on online payments and cards (Rs 1876) were 20% higher than that on COD (Rs 1566). Security concerns and privacy issues, better transparency during transactions, and a smoother checkout process are most likely the reason for such a trend, added the report.

Distribution across devices

At least 66% of online purchases were made on desktop PCs, with 23% higher average order value when compared to smartphones. Smartphone accounted for 33% of online purchases while tablets had only a 1% share. Interestingly, even though Android had a higher share of 84.4% on Mobile Web purchases, iOS users had a 40% higher average order value when compared to Android.

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In addition, the study said that devices with larger screen  (above 12”) provides a better buying experience, enabling users to research on products (price comparisons, reviews, etc.), hence desktops dominated the share of all online purchases.  Users on desktop also had a higher number of repeat purchases when compared to smartphone and tablets.

Consumers in Tier-1 cities are buying more

Online purchases from Tier-1 cities like Delhi-NCR, Mumbai, Bangalore accounted for 8 out of 10 orders,  with Tier-1 cities recording a 40% higher average order value, when compared to all their tiers, said the report. The data is taken from over 1.6 billion “user events” making over 2 million online transactions.

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Delhi-NCR had the highest number of online purchase accounting for 36.86% of orders among the cities studies by Sokrati. Mumbai took the second position with 18.9%, and Bangalore was third with 11.62%. Tier-2 cities like Coimbatore and Ahmedabad had lower online purchases share accounting for 1.26% and 1.04% respectively.

Higher disposable incomes, proportionately better access to larger screen devices, high-speed internet, and overall better delivery logistics, contributed to growth in order values in Tier-1 cities, suggested the report.

Clothing and mobile accessories dominated sales

Clothing, and Mobile accessories categories put together accounted for more than 60% of all online purchases studied by Sokrati, However, in terms of average order values and overall revenues, electronics and related accessories took the lead, closely followed by Homer Décor category. Electronics held a lower 6% share in terms of overall online purchases.

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In addition, sports and fitness category had the highest number of repeat purchases when compared to all other categories, even though it had a small 3% share in terms of online purchases. Clothing and accessories held the second position in terms of repeated purchases; electronics took the third position.

When are they buying?

At least 60% of the online purchases were made during office hours, i.e. 12-5 p.m. on weekdays, according to the study, with Wednesdays & Thursdays registering the highest number of all transactions.  Also note that, consumers shopped less during the end of the month, while buying more during the mid-month—probably an effect of monthly pay structures.

However, Indian consumers registered a higher average order value on Fridays, while it also remained high during Mondays and Wednesdays. Consumers transacting during weekends registered a lower average order value when compared to all other days of the week.

Image credit: Flickr user Jorge Franganillo under CC BY 2.0

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ